We have studied three conceptually different ways of "targeting" liposomes: (1) Antibody-mediated targeting. We find that antibody-bearing liposomes bind in large numbers to cells which bear the appropriate antigen. However, the bound liposomes are internalized only if endocytosis is possible. Upon endocytosis, liposome-entrapped methotrexate (MTX) can escape from the endocytic apparatus and bind to cytoplasmic dihydrofolate reductase, inhibiting growth of the cell. In the course of these studies, we developed the first heterobifunctional method for coupling antibody to liposomes. Current studies are directed toward HIV-infected cells. (2) Physical targeting. We have designed "temperature-sensitive" liposomes, which break down and selectively release an entrapped drug in vivo at temperatures achievable by local hyperthermia. These liposomes ppselectively deliver MTX to mouse tumors in vivo and inhibit their growth. (3) Compartmental targeting. We have demonstrated the delivery of liposomes and entrapped drug to lymph nodes after subcutaneous and intraperitoneal, injection and have determined cellular sites of localization. These studies have been extended to antibody-bearing liposomes. These strategies are being applied to problems in the therapy of cancer and AIDS. With respect to AIDS, we have formulated liposomes containing anti-viral drugs which do not ordinarily enter cells but which can be carried into monocyte/macrophages by the liposomes.